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Sunworks Announces Second Quarter Financial Results

Improved Sales Execution Driving Consistent Margin Improvement;

Solcius Residential Backlog Growing and Initiatives Underway to Expand Geographic Presence

ROSEVILLE, CA / ACCESSWIRE / August 12, 2021 / Sunworks, Inc. (NASDAQ:SUNW), a provider of solar power and battery storage solutions for residential, agriculture, commercial, industrial, and public works markets, today announced financial results for the second quarter ended June 30, 2021. On April 8, 2021, Sunworks, acquired Solcius, LLC ("Solcius"), a privately held, rapidly growing residential solar company, for $51.8 million, creating a national solar power provider with a presence in 12 states. The financial results for the second quarter will include the operating results of Solcius, since the acquisition, with no corresponding contribution in the year-ago period.

"With the integration of Solcius largely completed, we have made meaningful progress in improving all facets of our organization," commented Gaylon Morris, Chief Executive Officer of Sunworks. "Solcius now processes all new residential projects, and we are benefiting from their scale and expertise. The increased availability of batteries is enabling us to process several jobs that have been held in backlog since 2020. Additionally, Solcius is now offering battery storage as an add-on in all markets, giving consumers a more comprehensive solution and increasing our revenue opportunity. We have expanded to the Laredo, Texas market and plan to expand into Dallas in September and Houston by the end of the year. In line with trends in this market, we are anticipating strong year-over-year growth in residential revenue."

"On the commercial and industrial side, we are focused on improving operational excellence and project execution," continued Mr. Morris. "We have increased the rigor of our work-in-progress reviews to improve project accuracy and to reduce margin challenges that impacted results in the past. Additionally, Sunworks' Public Works group has signed two large projects, 555 kW and 752.4kW, in the last two months, both the results of new developer relationships, and we anticipate continued growth in that vertical. As a part of our increased focus on growing the value of the Sunworks' brand and increasing lead generation, we are increasing our investment in both sales and marketing and will be adding additional personnel to support those area."

Second Quarter 2021 Highlights:

  • Cash balance at June 30, 2021 was $26.9 million versus $39.0 million at December 31, 2020. The decrease in the cash balance for the second quarter of 2021 is partially the result of $48.9 million of capital raised in the first quarter and the $51.8 million Sunworks paid to acquire Solcius. Additionally, cash was used to take advantage of purchase discounts for materials and fund operations.
  • Total backlog of projects as of June 30, 2021 was $64.0 million, compared to $36.1 million as of June 30, 2020.
  • Revenue was $32.1 million compared to $9.7 million in the second quarter last year, reflecting the contribution of $22.8 million in revenue from Solcius.
  • Selling and marketing expenses were $10.2 million, or 31.7% of revenue, in the second quarter compared to $1.3 million, or 13.1% of revenue in the second quarter of 2020, reflecting the Solcius residential marketing model relying on dealer relationships to source customers.
  • Paycheck Protection Program loan of $2.8 million plus accrued interest was forgiven resulting in a $2.9 million gain on extinguishment of debt recognized as other income during the quarter.
  • Operating loss was ($4.8) million versus operating loss of ($1.3) million in the second quarter of 2020. Net loss for the quarter ended June 30, 2021 was ($1.9) million, or ($0.07) per basic and diluted share, compared to a net loss of ($1.5) million, or ($0.09) per basic and diluted share in the second quarter of 2020.
  • Adjusted EBITDA was ($1.7) million for the second quarter compared to an Adjusted EBITDA of ($1.2) million for the second quarter of the prior year.

Second Quarter Financial Summary

Total revenue for the quarter ended June 30, 2021 was $32.1 million compared to $9.7 million in the same period last year. Second quarter 2021 revenue included $22.8 in residential revenue from Solcius.

Gross margin for the second quarter of 2021 was 47.2% compared to 24.9% for the second quarter of 2020, reflecting the positive contribution from Solcius' business model and operational improvements throughout the business, including increased focus on accuracy in estimating and quoting and improved execution.

Operating expenses for the second quarter were $19.9 million compared to a $3.7 million in the second quarter last year, which includes $3.0 million of non-cash expense for stock-based compensation and depreciation and amortization in the current quarter.

Net loss for the quarter ended June 30, 2021 was ($1.9) million, or ($0.07) per basic and diluted share (based on 27.0 million shares), compared to net loss of ($1.5) million or ($0.09) per basic and diluted share (based on 16.6 million shares) in the second quarter of 2020.

Non-GAAP Financial Measures

EBITDA is a non-GAAP financial measure defined as net income (loss) excluding interest, taxes and depreciation and amortization. Adjusted EBITDA is further adjusted for non-cash stock-based compensation expense, gain on the extinguishment of PPP indebtedness, goodwill impairment and acquisition transaction expenses. Adjusted EBITDA is a key measure used by the Company to evaluate operating performance, generate future operating plans and make strategic decisions for the allocation of capital. The Company presents Adjusted EBITDA to provide information that may assist investors in understanding its financial results. However, Adjusted EBITDA is not intended to be a substitute for net income (loss).

Certain non-GAAP financial measures are presented in this press release, including Adjusted EBITDA, to provide information that may assist investors in understanding the Company's financial results and assessing its prospects for future performance. We believe these non-GAAP financial measures are important indicators of our operating performance because they exclude items that are unrelated to, and may not be indicative of, our core operating results. These non-GAAP financial measures, as we calculate them, may not be comparable to similarly titled measures of other companies and may not be appropriate measures for comparing the performance of other companies relative to the Company. These non-GAAP financial results are not intended to represent, and should not be considered to be more meaningful measures than, or alternatives to, measures of operating performance as determined in accordance with GAAP. To the extent we utilize such non-GAAP financial measures in the future, we expect to calculate them using a consistent method from period to period. A reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure is provided below.

  Three Months Ended  Six Months Ended 
  June 30, 2021  June 30, 2020  June 30, 2021  June 30, 2020 
Reconciliation of GAAP Net Loss to Adjusted EBITDA
Net Loss
 (1,867) (1,459) (6,680) (8,207)
PPP loan forgiveness
  (2,881)  -   (2,881)  - 
Stock-based compensation
  1,113   23   1,264   121 
Depreciation and amortization
  1,905   83   1,970   164 
Goodwill impairment
          -   4,000 
Interest expense
  21   137   30   396 
Acquisition transaction expenses
  40   -   750   - 
Adjusted EBITDA
 (1,669) (1,216) (5,547) (3,526)

Conference Call

The company will host a conference call and live webcast tomorrow, Friday August 13, 2021 at 10 a.m. ET. To access the call, please dial 844-602-0380 (toll free) or 862-298-0970 and if requested, reference conference ID 42497. The conference call will also be webcast live on the Investor Relations section of Sunworks' web site at

Following the conclusion of the live call, a replay of the webcast will be available on the Investor Relations section of the Company's website for at least 90 days. A telephonic replay of the conference call will also be available from 7 p.m. ET on August 13, 2021 until 11:59 p.m. ET on August 27, 2021 by dialing 877-481-4010 (United States) or 919-882-2331 (international) and using the passcode 42497.

About Sunworks, Inc.

Sunworks, Inc. (NASDAQ:SUNW) is a premier provider of high performance solar power systems. Sunworks is committed to quality business practices that exceed industry standards and uphold its ideals of ethics and safety. Sunworks continues to grow its presence, expanding nationally with regional and local offices. The company strives to consistently deliver high quality, performance-oriented solutions for customers in a wide range of industries including residential, commercial, industrial, agricultural, federal, and public works. Sunworks' diverse, seasoned workforce includes distinguished veterans who bring a sense of pride, discipline, and professionalism to their interaction with customers. All Sunworks' employees uphold its guiding principles each day. Sunworks is a member of the Solar Energy Industries Association (SEIA) and is a proud advocate for the advancement of solar power. For more information, visit and

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about (i) the expectation that future business will benefit from the expertise and scale contributed by Solcius; (ii) the increased availability of batteries; (iii) our expansion plans into new territories; (iv) the growth of our residential and public works businesses; (v) our ability to improve margins; (vi) our return on investment in sales and marketing; and (vii) other statements identified by words such as "expects" "anticipates," "intends," "plans," "believes," "seeks," "estimates," "targets," "projects," or words of similar meaning generally intended to identify forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of Sunworks. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed in these forward-looking statements because of possible uncertainties.

In addition, the following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (i) the businesses of Sunworks and Solcius may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; (ii) the expected growth opportunities or cost savings from the transaction may not be fully realized or may take longer to realize than expected; (iii) risks that the business combination disrupts current plans and operations that may harm ongoing business operations; (iv) the amount of any costs, fees, expenses, impairments and charges related to the transaction; (v) operating costs, loss of customers and business disruption following the transaction, including adverse effects on relationships with employees and customers, may be greater than expected; (vi) economic, competitive, regulatory, environmental and other factors may adversely affect the business in which Sunworks is engaged; and (vii) the continued impact of COVID-19 and the related federal, state and local restrictions on business operations and the workforce, the impact of COVID-19 and such restrictions on customers, and the impact of COVID-19 on the supply chain and availability of shipping and distribution channels. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in Sunworks' reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the SEC and available on the SEC's Internet site (

Investor Relations Contact:

Rob Fink

AS OF JUNE 30, 2021 AND DECEMBER 31, 2020
(dollars in thousands, except share and per share data)

  June 30, 2021  December 31, 2020 
Current Assets:
Cash and cash equivalents
 $26,860  $38,991 
Restricted cash
  348   348 
Accounts receivable, net
  8,383   2,890 
  6,973   1,179 
Contract assets
  9,824   2,397 
Other current assets
  2,540   137 
Total Current Assets
  54,928   45,942 
Property and equipment, net
  3,725   198 
Finance lease right-of-use assets, net
  1,142   - 
Operating lease right-of-use assets
  2,479   694 
  120   47 
Intangible assets, net
  10,770   - 
  37,654   5,464 
Total Assets
 $110,818  $52,345 
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities
 $15,914  $7,356 
Contract liabilities
  12,911   6,260 
Finance lease liability, current portion
  415   - 
Operating lease liability, current portion
  860   649 
Paycheck Protection Program loan payable, current portion
  -   787 
Total Current Liabilities
  30,100   15,052 
Long-Term Liabilities:
Finance lease liability, net of current portion
  409   - 
Operating lease liability, net of current portion
  1,619   45 
Paycheck Protection Program loan payable, net of current portion
  -   2,060 
Warranty liability
  1,191   1,131 
Total Long-Term Liabilities
  3,219   3,236 
Total Liabilities
  33,319   18,288 
Commitments and contingencies
Shareholders' Equity:
Preferred stock Series B, $0.001 par value, 5,000,000 authorized shares; no shares issued and outstanding
  -   - 
Common stock, $0.001 par value; 50,000,000 authorized shares; 27,047,744 and 23,835,258 shares issued and outstanding, at June 30, 2021 and December 31, 2020, respectively
  27   24 
Additional paid-in capital
  172,787   122,668 
Accumulated deficit
  (95,315)  (88,635)
Total Shareholders' Equity
  77,499   34,057 

Total Liabilities and Shareholders' Equity
 $110,818  $52,345 

(dollars in thousands, except share and per share data)


 Three Months Ended  Six Months Ended 

 June 30, 2021  June 30, 2020  June 30, 2021  June 30, 2020 
Revenue, net
 $32,091  $9,670  $38,260  $22,031 
Cost of Goods Sold
  16,953   7,263   23,031   17,798 
Gross Profit
  15,138   2,407   15,229   4,233 
Operating Expenses:
Selling and marketing
  10,165   1,268   11,396   2,795 
General and administrative
  6,738   2,365   10,190   4,974 
Goodwill impairment
  -   -   -   4,000 
Stock-based compensation
  1,113   23   1,264   121 
Depreciation and amortization
  1,905   83   1,970   164 
Total Operating Expenses
  19,921   3,739   24,820   12,054 
Operating Loss
  (4,783)  (1,332)  (9,591)  (7,821)
Other Income (Expense)
Other income, net
  2,886   10   2,890   10 
Interest expense
  (21)  (137)  (30)  (396)
Gain on disposal of property and equipment
  51   -   51   - 
Total Other Income (Expense), net
  2,916   (127)  2,911   (386)
Loss before Income Taxes
  (1,867)  (1,459)  (6,680)  (8,207)
Income Tax Expense
  -   -   -   - 
Net Loss
 $(1,867) $(1,459) $(6,680) $(8,207)
 $(0.07) $(0.09) $(0.26) $(0.59)
 $(0.07) $(0.09) $(0.26) $(0.59)
  27,047,744   16,628,992   26,145,676   13,896,447 
  27,047,744   16,628,992   26,145,676   13,896,447 

SOURCE: Sunworks, Inc.

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